RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

We are NOT in the business of picking bottoms.  You know what they say about trying to catch the proverbial “falling knife”.  But this morning’s recovery above Mon’s 99.975 initial counter-trend high confirms a bullish divergence in short-term momentum that defines Mon’s 91.0754 low as one of developing importance and a short-term risk parameter from which non-bearish decisions like short-covers and cautious bullish punts can be objectively based and managed.

This admittedly short-term momentum raises the relevance of some critical ancillary evidence of a bottom that could be major in scope, including:

  • an arguably complete 5-wave Elliott sequence down from 16 Dec19’s 128.55 high (although a confirmed bullish divergence in momentum above 11-Mar’s 106.85 corrective high and key risk parameter is required to confirm this count)
  • the Fibonacci fact that the suspected 5th-Wave down from 11-Mar’s 106.85 is exactly 61.8% of the length (i.e. 0.618 progression) of the preceding net Waves-1-thru-3 from 128.55 to 102.75
  • historically bearish sentiment level and
  • the market’s current proximity to the extreme lower recesses of its historical 11-YEAR range shown in the monthly log chart below.

Of course, we cannot conclude a broader reversal from proof of just smaller-degree strength.  But if there’s a time and place and at least some technical facts and observations for this market to reverse course, we believe that it is here and now.  And,quite simply, it will take a relapse below Mon’s 91.05 new short-term risk parameter to negate this call.  Until and unless such weakness is proven, we believe a new cautious bullish policy and exposure from at-the-market (100.85) levels OB are appropriate with a failure below 91.05 required to negate this call and warrant its immediate cover.

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